Minnesota's Much Improved Structured Settlement Protection Act is Signed into Law

by Structured Settlement Watchdog

Both houses of the Minnesota legislature have approved important changes to the Minnesota Structured Settlement Protection Act as it hits the governor's desk.  That the measure was approved unanimously in the Minnesota Senate and by an overwhelming 121-4 vote in the Minnesota House of Representatives shows just how impactful last Fall's scathing 4-part multipart report in the Minneapolis Star Tribune was in opening lawmakers' eyes to the fulminating abuse of Minnesota citizens.  

The updated Minnesota SSPA has been signed by Minnesota Governor Tim Walz and will go into effect Aug. 1, 2022

I covered the proposed changes in my March 15, 2022 post Minnesota Structured Settlement Protection Laws to Grow Teeth if HF 3768 Passed

The proposed discount interest rate cap did not make the final bill as part of a compromise. While this may seem counterintuitive, an interest rate cap does not necessarily serve the interest of citizens of any state if the capital to provide liquidity (when necessary and approved) is not available and encourages predatory forum shopping to neighboring states, inveigling citizens in a fraud that will be held against them if they squeal " FOUL" later.  Nasty stuff. Plenty of examples.

Minnesota SSPA | The Only State to Require an Outside Attorney to Advise Structured Settlement Transfer Judges

When the law goes into effect August 1, 2022, Minnesota will become the only state in the USA that among other things, will require the appointment of an outside attorney to advise Minnesota judges on whether to approve the sale/transfer of structured settlement payment rights for anyone that appears to suffer from mental or cognitive impairments.  According to the Minneapolis Star Tribune, one in eight  (structured settlement factoring) transactions involved a seller with documented mental health problems, including people institutionalized at the time they agreed to sell their payments or who struck deals shortly after they were released. Many of those sellers told the Star Tribune that they didn't understand what they were giving up in these transactions, including a car accident victim who sold more than $500,000 in future payments for just $12,001 in 2019 reported the Trib.

Monthly structured settlement payments may be the primary source of income for accident victims who are unable to work because of catastrophic, lifelong injuries

For aggressive structured settlement factoring companies, the "whales" are young adults with long term structured settlements for repeat sales for pennies on the dollar.

No other state routinely requires the appointment of an independent advisor to protect the interests of a seller claims the Star Tribune

Minnesota judges also will be able to appoint an independent advisor on any case if they want an outside opinion on the sale. Those advisors will be paid by the factoring companies, with costs capped at $2,000 per case.

 

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When the law goes into effect August 1, 2022, Minnesota will become the only state in the USA that among other things, will require the appointment of an outside attorney to advise Minnesota judges on whether to approve the sale/transfer of structured settlement payment rights for anyone that appears to suffer from mental or cognitive impairments.  According to the Minneapolis Star Tribune, one in eight  (structured settlement factoring) transactions involved a seller with documented mental health problems, including people institutionalized at the time they agreed to sell their payments or who struck deals shortly after they were released. Many of those sellers told the Star Tribune that they didn't understand what they were giving up in these transactions, including a car accident victim who sold more than $500,000 in future payments for just $12,001 in 2019 reported the Trib.

Monthly structured settlement payments may be the primary source of income for accident victims who are unable to work because of catastrophic, lifelong injuries

For aggressive structured settlement factoring companies, the "whales" are young adults with long term structured settlements for repeat sales for pennies on the dollar.